Free loans for biz, thanks to Mama government, market up >10% after a year of +25%, vacation and travel spending down, savings rate higher. You’ll be busier when the next $900B+ comes through.

Enjoy it Chip, it’s a good thing, but business will be slow in the next 2-5 years


_________________________________________________
“Surround yourself with good people and life will be great”

Shaun

Shaun,

I agree. I think we are headed for a serious dip!

Tony,

Thanks for editing this. I think a couple of folks that responded took offense to the original tone of your post, before you edited it, I know I did.

I’ve caught grief from you and a few others on Beechtalk over the years and that’s ok... it seems that the Covid threads are where sides were really taken and that is unfortunate, because aside from that I would think you and I would be friends.

You have a perception of what I do on Beechtalk and why... and that is fine. I’m clearly in business and I support Beechtalk financially so that I’m allowed to talk openly about my services, but it is not a huge amount of money and I have no doubt that Jeff can kick me off and not miss the revenue. I’m also thankful that if he did our business wouldn’t notice, the reality is that we run very close to capacity and have for the last few years. I’m not bragging, only stating facts. I’m much more concerned that I’ll develop the reputation that I’m too busy to help people than I am a reputation that I’m somehow this desperate, predatory hawk on Beechtalk preying on the innocent and trying to force my services on anyone.

I started this company to help buyers of aircraft... guys like you, sometimes you do all of your homework, assume you have it all figured out and that you are smarter than Joe the aircraft broker... yet you get screwed. What’s worse is that you are so embarrassed that you keep it to yourself so no one knows Joe is an unscrupulous broker.

I truly want to protect buyers from people like Joe... I really do.

Much of what I do, I do for free, it is a mission for me. You have no way of knowing this, but there’s a lot of Beechtalkers who I’ve helped navigate the unruly seas of buying an airplane without charging them a dime... and I was glad to do it.

What bothers me is when people are afraid to ask for my help, because someone like you, who doesn’t know me, insinuates that I’m the very predator that I’m trying to protect them from!

I’m here, I have a mission to help aircraft buyers... If a Beechtalker hires us great... but I’ll help many more people than actually hire us. Please know that in spite of what some people might say, I am more than willing to share my extensive experience with anyone who is navigating the shark filled waters of buying an airplane, free of charge.

I’ve been in this industry a long time, I made a lot of money as an aircraft broker, I’m not proud of all of it, I learned a lot about how not to do business. It’s that experience that convinced me there was a better way. I can’t make this industry right, but I can do my part and I can help buyers understand the pitfalls.

Our business is finding off market airplanes and doing the legwork to get them purchased. We get paid for that. I make no excuse for it. Helping aircraft buyers avoid getting screwed? I do that for free... and that is why I’m on Beechtalk and that is why I started this thread.

.

Just to be clear, the only edit I made was to correct a misspelling.

I’ve made this point before, but it is worth repeating. It’s easy to think of Beechtalk as a small group of friends (and sometimes foes) but that isn’t reality. The truth is 1000’s and maybe 10’s of thousands of people will find this thread and (hopefully) benefit from it.

I wish I had more piston knowledge to share as most active Beechtalkers are buying pistons, but most of my experience is in turbines. The majority of our clients and many of the people who will read this are business owners not airplane enthusiasts. They are doing their research to learn how to buy an airplane, the things that seem obvious to someone who has purchased numerous aircraft are quite mysterious to those who haven’t. I’m not trying to create mystery, I’m trying to explain it.

Most new aircraft buyers enter our world with real estate experience and they assume aviation works the same way. That they will be afforded the same protections. They are often shocked to discover that the industry isn’t regulated, brokers are not licensed (in most states) and there’s typically no discloser of fund dispersement at closing.

It’s the Wild West! Which is ok, as long as you are armed with knowledge!

I’ve always found the adage of “nothing good happens after (pick your time)” is helpful in life. What time does the clock reset? 4am?

Back on track here, as I mentioned, I read on another thread were one of our fellow BT'er's was really struggling to buy an airplane and had one sold out from under him.

There's already been some good input and the one thing that has emerged that is one of my key points of advice is to be ready to move and move quickly when an opportunity presents itself.

It's always tough being the first cowboy through the door, but depending on what type of aircraft you are looking for, you may not have any choice. We try to get airplanes under contract before they ever make it to Controller, but we watch Controller like a hawk and if one slips through and makes it to the market, we're on it immediately. This does put us at a disadvantage from a negotiation standpoint, but if the market is so tight that we're waiting for an airplane to pop up, we have to snag it quick because we're not the only ones looking.

It sounds like I am selling airplanes and promoting the idea of a seller's market, we don't and I am not. I'm simply sharing what we are experiencing right now. I've been doing this a long time and I've never seen this level of activity.

My next piece of advice is, if you can wait until after the first of the year, wait!

I don't know what will happen then, but I doubt it will be any crazier than it is right now!

Chip,

I enjoy your posts and your insight into the market.

Thanks for being a sponsor!

Dave

Chip - why do you (and others) think we are headed for a dip in the aircraft market? Is that opinion reflective of just the aircraft market or a view on the broader economy over the next 4 years?

Just curious. Things are definitely hopping now in the used aircraft market. In my business, I personally see a strong market for the next year or two. A lot of investment capital will be coming off the sidelines IMO in 2021 and 2022, at least that's what it looks like to me right now and that will boost the economy, as will the relaxation of COVID limitations in the 2d half of 2021. But I could be wrong.

Don't want to go too far off-topic just curious.

Cheers

I appreciate the conversation between Tony and Chip and won’t take sides. They both make fair points. Tony knows how to assess and buy aircraft and Chip can find them and has that service for lessor experienced owners, or with less time.

My2 cents,...

How do you buy an aircraft in a Sellers market?

1. Very carefully, whether you need support or can do the process more on your own.

2. Be patient but prepared.

Specific hands on knowledge of the type of aircraft and a proper prebuy inspection go a long way. Same with logs, do you know what to look for, do you understand the probability for failure or maintenance issues with time and calendar for various items. How many people don’t even bench test or send out mags, nor willing to just replace at the age where failure probability goes up significantly? Some shops just write inspected under the annual, so what does that mean, ask,...etc. Just a simple example.

When there is a good buyer and good seller they are both prepared and do things the best they can. When there is inexperience, lack of knowledge, insecure arrangements, poor communication, things don’t go well even when there is an eventual closing. Someone earlier said the phone is a good filter, and it helps a lot if you know what to ask on both ends.

A lot of people would like, me as well, if we could just shake hands and fly off - even on a simple aircraft with simpler systems. You still need to have specific understanding of what you are buying. You may get lucky but I’d rather fully understand what I am inheriting and accept what both best and worst case maintenance scenarios would be under my ownership might be and costs over whatever timeline I intend to own the aircraft for.

I bet both Tony and Chip have well earned knowledge.

Hey Joel,

The overall aircraft market is cyclical, it usually follows the economy, but not always. We typically see inventory levels drop, prices start to go up and then the dip follows. It’s really hard to say if it is just a normal cycle or if it is driven by the economy. We now have so many external factors involved that I couldn’t begin to guess what is going to happen and when.

From an aircraft buying viewpoint we just need to be realistic and realize that as we pay more for an airplane today, the difference in 3-5 years may be more of a drop than what we’ve come to expect.

Of course I’m speaking in very general terms again, while everything else was heating up this year we saw the late model King Air 350i market drop like a rock. There were several factors, but it was odd to watch those aircraft going down in value when the CJ3’s and Excel / XLS’s were going up.

The inventory numbers are key, right now there’s virtually no Excel’s worth buying, we waited for months to make a buy on one. If that trend continues values will stay up, but only as long as inventory levels remain low above the Excel, if there’s a glut of XLS’s and prices drop the Excel will be effected.

Watching these dynamic ever changing markets is fascinating.

It is noteworthy that a lot of people do seem to be choosing to fly private to avoid the airlines. Some of that is a guy buying a 182 or a Bonanza, some of it is charter, and some of it is people / companies that can, using it as justification to go buy a jet.

We’ve had a couple of clients add jets to their fleet recently, the logic is to eliminate airline travel. Their previous MO had been to use King Airs for the shorter trips and then take the airlines on long trips.

This is one of those external factors we really haven’t seen before.

Chip, how many late model 350i's change hands in a typical quarter? Is this a small enough niche that if two guys unexpectedly have bypass surgery sales can dry up for a few months?

Who cares if he is trying to gain from it? Not sure he is but so what. He also adds a lot of info for guys flying a 150 ( pick your plane ) might not know anything about or a lot of us that fly other type planes. Ignore him if you don’t like it. There is plenty of bandwidth to go around that we can’t spare the room for another post.